CTGDF(601888)：3Q PRELIM REV/NP +28%/93%; ESTIMATES UNCHANGED

　　CTGDF reported preliminary 3Q financial data with revenue increasing by +27.9% YoY to RMB15.0bn, gross margins expanding to 34.3% (1Q/2Q: 28.8%/32.5%), and net profits growing +93.1% to RMB1.3bn. The quarter’s revenue was apparently flattish compared to that of 2Q, and that should not come in as a surprise to the market given the trajectory we observed in the visitation momentum to Hainan (6M: 30.3% YoY vs 8M: 38.6% YoY). Other than that, a slightly lower pre-tax margin of 10.8% (2Q: 11.9%) caught our attention and that was probably owing to higher revenue shares to airports. All in all, when consensus expectation is tapering, we continue to argue that earnings risk is incrementally contained, and our implied 4Q revenue/net profits of RMB21bn/1.7bn should look intact on a seasonally stronger festival travelling and spending.
　　Major 10.1 Golden week indicators were a mixed bag... A total of 826mnpeople travelled domestically between the 8 days of 29 Sep to 6 Oct, 104% of pre-COVID but is below government target of 113%. In dollar terms, tourism revenue of RMB753bn stood at 102% of pre-COVID level. Each traveller spent 4% less vs pre-COVID and yet 5% more vs the 5.1 holiday this year. Our TMT team noted that long-haul travel has increased to 51% of the mix, compared to 35% in 2022.
　　 but those of Hainan looked well-expected. A total of 4.3mn tourists tothe Island during the break, 107% of pre-COVID and 133% of the level seen in the 5.1 holiday this year. The number of DF shoppers per day is 3% less, and each shopper spent 3% less compared to 5.1.
Earnings change. We largely maintain our forecasts for now and wait for further details at full results release on 27 Oct. In our model, we continue to assume RMB46bn Hainan DFS revenue (including Haitang Bay).
Valuation. We maintain our average valuation from 2018 inclusive. In our view, there is presumably no quick fix to the flattering consumption recovery, and now we project CTGDF to grow at a more normalised cadence over 2024-25E in tandem with the macro economy. With no major changes to our earnings forecasts, our revised TP is based on an updated 27.5x (from previously 29.0x) end-24E P/E which still benchmarks to -1sd below 5-year average since 2018.
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   【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。